Bitcoin Trend Reversal

Authored by Chandan Choudury

None of the above is investment advice. It is Chandan sharing his observations with the community.

If you are in the crypto space then the last two months has given you enough reasons to worry. Bitcoin nosedived or rather has fallen from a cliff. Portfolios across the spectrum painted a sorry state and the only answer everyone seeking is where is the Bottom.

It all started with the South Korean FUD of banning the exchanges followed by Bitconnect’s massive expose. Legendary Investor Warren Buffet’s warning of cryptos having a bad ending was not taken lightly by the markets at all. Indian governments indecisiveness to regulate the cryptocurrencies too contributed in the continuous downtrend. News from Tether made things look even worse. Outcome of US Senate hearing on cryptocurrencies created jitters across the crypto-world.

Lastly medias role in exaggerating the whole move should not be ignored at all.

However, if this is the biggest invention after internet and going by its previous track record it has and will survive any scare: come what may.

Technically speaking:

1. Bitcoin had a massive 2000% rally last year. In this course, we saw a parabolic rally which is always threatening.
2. From the high of $19891 (As per coinbase data) bitcoin dropped to $10400. However on the pullback for the first time it didn’t break it s previous high, settling with a high of $17178.
3. Prices dropped and the major support of $10400 was taken out confirming $17178 as the lower high and starting of a downtrend.
4. Subsequently new lower highs ($12985 & $9500) and lower lows ($9017, $7540 & $5873) were formed.
5. The only way this sob story could end is prices breaking the last lower high of $9500.

Where next?

PHEW

The day has finally arrived and the dreaded downtrend is over!! Bitcoin prices have finally scaled the last lower high of $9500

Indeed a great news for the believers of this Technology and the concept of HODL

This fall has contributed to many good things than bad. To list a few :-

1. Bitconnect is out of the way making the market more healthier now.
2. The move from $8000 to All time high was absolutely swift and parabolic. A further upmove without testing the lows would have been disastrous.

If one observes carefully the higher low of $5500 which led to the break of $8000 was the low which mattered the most. Ideally any violation of that number would risk bitcoin’s structural uptrend.

1. Just like Bitcoin the total cryptocurrency market witnessed a rally from $130Bn to $850Bn+ Correction was absolutely necessary to check complacency among market players
2. Major stoplosses were triggered flushing out many weak hands
3. A nice bit of consolidation happened in the price range of $7500-$8800 levels

Way Forward:

Bitcoin price journey is now a different ball game. Last year it continuously made new ATH’s. This year it has to break so many barriers to reach the new ATH. Major resistances are $9500, $12985, $17178 and $19891

Currently the major support which should hold and ready Bitcoin for this daunting task is $5873

Low of $7853 might act as a small support. Traders holding longs can put a trailing stop loss below $7853 levels.

The low of $5873 looks more or less secure.

Smart Investors/Traders who had exited on top can re-enter the markets in a rejuvenated manner. Existing players can breathe easy and continue or add fresh positions.

Caution ahead for positionally short traders.

It is fair to believe that Bitcoin relatively still rules the roost and price recovery of Bitcoin would replicate into Altcoins as a whole.

Happy Investing 😊

This would be a great watch for all those who believed :)

Made by a redditor not by us :) we were only very inspired by it.

#DYOR